Section 143

Section 143 — the law in short

What the courts have decided on section 143, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• PCIT v Abhisar Buildwell P Ltd Supreme CourtCuts both ways
  Search assessment for a year already completed, but nothing incriminating was found. Can the officer still add?
  No — not under s.153A. For completed or unabated assessments the addition must rest on incriminating material found in the search. But the Court preserved the department's power to reopen those years under ss.147 and 148 instead.
• Genpact India Pvt Ltd v DCIT Supreme CourtHelps departmentValidity unconfirmed
  The Assessing Officer has fastened buy-back tax under s.115QA on my company. Do I have a right of appeal, or must I go to the High Court by writ?
  You have a right of appeal. The Supreme Court held that a determination of liability under s.115QA is covered by the words 'an order against the assessee, where the assessee denies his liability to be assessed under this Act' in s.246(1)(a) and s.246A(1)(a), so an appeal lies; and because that remedy exists, the High Court was right to refuse a writ petition.
• P.R. Metrani v CIT Supreme CourtHelps taxpayerSuperseded by amendment
  Can papers seized in a search be presumed true against me in the regular assessment?
  That was not the law as this case decided it: the s.132(4A) presumption operated only within the search proceedings and not in a regular assessment under s.143. Parliament changed that by inserting s.292C in 2007. What survives from this judgment is that the presumption is rebuttable and that seized documents can still be used as ordinary evidence even without it.
• Tin Box Company v CIT Supreme CourtHelps taxpayer
  The AO never heard me but the CIT(A) did. Does the appeal cure the defect?
  No. Failure to follow the principles of natural justice at the assessment stage cannot be made good in an appeal. Once it is found that the officer did not give the assessee a proper opportunity of hearing, the assessment order is to be set aside and the matter remanded to the officer for a fresh assessment after a proper opportunity.
• Modi Industries Ltd v CIT Supreme CourtCuts both ways
  My assessment was reduced in appeal and more advance tax turned out to be excess. Does section 214 interest run to the date of the revised assessment?
  No. The Supreme Court, resolving a conflict that had divided almost every High Court, read regular assessment in section 214 as the first assessment order made by the Income-tax Officer under section 143 or section 144. Interest under section 214(1) therefore runs from 1 April following the financial year to the date of that first assessment, and the excess is measured against the tax determined by it, not against the tax as reduced later in appeal or revision. Excess tax thrown up by an appellate or revisional order is dealt with by the refund provisions instead, in particular section 244(1A).
• Rajinder Nath v CIT Supreme CourtHelps taxpayer
  An appellate order in my firm's case said the officer is free to assess the amount in the partners' hands. Does that lift the limitation bar for assessing me?
  No. The Supreme Court held that the words finding and direction are limited in meaning. A finding must be one necessary for the disposal of the particular case, of the particular assessee and for the particular year, and directly involved in that disposal; an incidental finding will not do. A direction must be express, necessary for the disposal, and within the power of the authority making it. Saying the officer is free to take action leaves the matter to his discretion and is not a direction at all. Section 153(3)(ii) does not enlarge jurisdiction; it only raises the bar of limitation.
• CIT v Vegetable Products Ltd Supreme CourtHelps taxpayer
  The provision can be read two ways. Which reading wins?
  Yours. Where two reasonable constructions of a taxing provision are possible, the one favourable to the assessee must be adopted. Applied here to hold that penalty is computed on tax payable after credit for amounts already paid.
• Bannanje Grahakara Vividhoddesha Sahakara Sangha Ltd v CIT (Appeals), NFAC High CourtCuts both waysValidity unconfirmed
  The Tribunal remanded the nominal member issue to the Assessing Officer but recorded findings on the merits while doing so, leaving the officer nothing to decide. Is there anything I can do about that in the High Court?
  Yes. The Karnataka High Court declined to interfere with the order of remand itself, but accepted that the Tribunal's observations on the merits might prejudice the assessee and clarified that the remand proceedings are to be considered independently, uninfluenced by any observations or findings recorded by the Tribunal on merits, strictly in accordance with Mavilayi Service Co-operative Bank and having regard to the relevant provisions of the Karnataka Co-operative Societies Act.
• Kailashben Manharlal Chokshi v CIT High CourtHelps taxpayer
  I disclosed a large sum in the search statement and retracted two months later. Will the retraction hold?
  Partly, and only for what the department cannot corroborate. An admission is evidence but not conclusive, so additions for house property, gold and furniture that rested only on the retracted statement were deleted, while the amount matched by unaccounted cash actually found was upheld.
• Dixit Rice Mill v DCIT (CPC) ITATCuts both ways
  Must an assessee first apply for rectification to CPC before appealing against a s.143(1) intimation?
  CPC made adjustments in a s.143(1) intimation without giving the assessee an opportunity, and the CIT(A) dismissed the appeal on the footing that the assessee should have applied online for rectification first. The Tribunal held that an appeal lies to the CIT(A) against a s.143(1) intimation and that there is no requirement in law to approach CPC for rectification before appealing.
• Marmo Home v DCIT ITATCuts both ways
  If I did not appeal the s.143(1) intimation, can I attack the same adjustment in the appeal against the s.143(3) order?
  The Tribunal rejected the argument that a s.143(1) intimation merges into the later s.143(3) assessment order. It held that the appealable orders listed together are independent of each other, so an adjustment made at the processing stage had to be challenged in an appeal against the intimation and could not be revived in the appeal against the scrutiny assessment.
• CBDT Instruction No. 03/2017 — the demonetisation cash verification SOP CBDT Circulars & InstructionsCuts both ways
  Is there a departmental instruction telling the officer how to verify my demonetisation cash deposits, and what comparisons is he supposed to make?
  Yes. The Board issued a Standard Operating Procedure on 21 February 2017 for the online verification of cash deposits made in the demonetisation window. It fixes deposit levels at which no further verification is to be made — up to 2.5 lakh for an individual without business income, and Rs. 5.0 lakh for a person above 70 — and it lists the comparisons an officer is to run before treating recorded cash sales as back-dated, the first of which is an abnormal jump in cash sales for November and December 2016 against the assessee's own earlier history.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.